The reality of l c payment operation at vid publicbank ho chi minh city branch

HCMC UNIVERSITY OF FOREIGN LANGUAGES & INFORMATION TECHNOLOGY DEPARTMENT OF INTERNATIONAL BUSINESS ADMINISTRATION GRADUATION PAPER THE REALITY OF LIC PAYMENT OPERATION AT VID PUBLIC BANK, HO CHI MINH CITY BRANCH Student name: LE QUANG TRIET Class: KQI002 Advisor: MR CHAU THE JUNE 2014 HOD (MBA) CONTENT ACKNOWLEDGEMENT III ADVISOR'S ASSESSMENT IV ABSTRACT V LIST OF FIGURES AND TABBLES VI LIST OF ABBREVIATIONS VII INTRODUCTION Chapter 1: Overview of Letter of Credit and its characteristics 1.1 Deft niti on and features of the documentary credi t 1.1.1 Definitions of the documentary credit 1.1.2 Parties involved in an LlC procedure 1.1.3 Features of the payment by LlC 1.2 L/C's main content 10 1.2.1 Credit nUlnber 10 1.2.2 Issuing place of LlC 10 1.2.3 Date of Issuance 11 1.2.4 Identity of relevant parties 11 1.2.5 Credit currency and Amount 11 1.3 Different types of L/C 11 1.3.1 Based on characteristics 11 1.3.2 Based on payment due date 12 1.3.3 Special types of L/C 13 1.4 Uni form Customs and Practice for Documentary 1.5 Advantages and Disadvantages Credit of usi ng L/C 16 1.5.1 For the Importer 16 1.5.2 For the Exporter 16 1.5.3 For the Issuing Banle , 15 Chapter 2: The current 17 situation of LIC payment operation Public Bank, Ho Chi Minh City Branch 2.1 Overview ofVID Public Bank- II Page HCMCBranch at VID 18 18 2.1.1 General information of VID Public Bank 18 2.1.2 The history 19' 2.1.3 The corporate structure 21 2.1.4 The HCMC Branch's structure 22 2.1.4.1 Board of Managers (BOM) 22 2.1.4.2 Accouting & Treasury Department 22 2.1.4.3 Department of Administration 23 2.1.4.4 Department of Credit .23 2.1.4.5 International Payment Department 24 2.2 Overall financial performance ofVIDPB, HCMC Branch 25 Chapter 3: The reality ofL/C operation at HCMC Branch 28 3.1 The realityofLiC HCMC Branch 28 opetationat 3.1.1 Results of LlC payment 29 3.1.2 Procedure of LlC payment 31 3.1.2.1 Issuing import LlC 31 3.1.2.2 Issuing amendment of import LlC 32 3.1.2.3 Checking documents 32 3.1.2.4 Notification of the invalid document set 33 3.1.2.5 Acceptance to pay for the document set 34 3.1.2.6 Endorsing B/L or shipping guarantee letter 34 3.1.2.7 Commitment of payment to foreign bank 35 3.1.2.8 Payment ofL/C 35 3.2 Opportunity analysis , 35 3.3 Threat analysis 36 3.3.1 Competition from other banks 36 3.3.2 Bank fraud 36 3.3.3 Facilities 36 Chapter 4: Solutions and recommendations to improve the quality of L/C payment at VIDPB HCMC 38 4.1 Development 38 direction ofVIDPB HCMC 4.2 Main solutions to improve the quality ofL/C payment 4.2.1 Main solutions to the bank IIIPage 39 : 39 4.2.1.1 Improve the expertise 4.2.1.2 Completing of its staff the operation 4.2.1.5 Expanding 4.2.1.6 040 of LlC payment 4.2.1.3 Enhancing the efficiency 4.2.1.4 Modernizing 39 of marketing activities the technology AO in the bank 4l the payment operation for export activities Strengthening 4.2.1.7 Implementing external Al 042 relationships appropriate customer policies 43 4.2.1.8 Enhancing the management and the use of various types ofLlC 44 4.2.1.9 Adopting safety principles in payment operation 45 4.3 Several recommendations to improve the quality of LIC payment at VIDPB H CM 045 4.3.1 Recommendations to the Government 4.3.2 Recommendations to the State Bank of Vietnam 4.3.2.1 Creating a legal environment for international A5 ~ 046 payment operations of commercial A7 banks 4.3.2.2 Stabili zing the exchange rate A7 4.3.2.3 Completing A8 and developing the foreign exchange market in Vietnam 4.3.3 Recommendations to importers, 4.3.3.1 Improving the expertise import-export exporters of foreign trade and international payment for staff in 048 department 4.3.3.2 Understandipg 4.304 Recommendations 4.304.1 Strengthening partners 49 to VIDPB HCMC financial 4.3 04.2 Regarding organization capacity and human resources 4.3 04.3 Regarding attracting customers 4.30404 Regarding banking technology 50 50 50 50 51 4.304.5 Expanding the agent network 51 4.3.5 Recommendations 52 to relating agencies CONCLUSION 53 REFERENCES 54 APPENDICES 56 -_._ _._._.III I P age IV IP age ACKNOWLEDGEMENT The author wishes to thank several people I would like to express my gratitude to my supervisor Mr Huu The Chau for the useful comments, remarks and engagement through the learning process of this undergraduate thesis I cannot say thank you enough for his tremendous support and help I feel motivated and encouraged every time I attend his meeting Without his encouragement and guidance this project would not have materialized Last but not least, many special thanks to my family Words cannot express how grateful I am to my mother, and father for all of the sacrifices that you've made on my behalf VIPage ADVISOR'S ASSESSMENT 1\.lc~3.1~ ~OTt;:55"" . -0:-00 '- .- 1T2JfJS.BO II.OGICO FAREAST I 45 DURING THE MONTH OF ~ 100,000.00 -O:-o-cr -. -0:'0 0. -0:-0'0 - 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